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October 6, 2014

Latest Economic News From U.S. And Canada

  • The overall U.S. trade deficit narrowed to $40.1 billion in August from $40.3 billion July as exports rose $0.4 billion and imports increased just $0.2 billion. The goods deficit rose, however, to $59.9 billion in August from $59.8 billion in July. Exports and imports of good both increased $0.1 billion.
  • Canadian economic growth remained flat between June and July as oil and gas production declined 1.6 percent and production in the manufacturing sector increased one percent. The Canadian trade deficit, meanwhile, unexpectedly increased to $610 million (in Canadian dollars) in August from a $2.2 billion surplus in July. Imports rose 3.9 percent and exports fell for the first time in four months in a report analysts called “sorely negative.”
  • The U.S. economy added 248,000 jobs in September (manufacturing employment increased by 4,000 jobs) as the national unemployment rate fell from 6.1 percent in August to 5.9 percent last month. The U.S. labor force participation rate remains at a nearly 35-year low, however. The U.S. Labor Department also announced last week the number of Americans who filed for federal unemployment benefits for the first time fell to 287,000 for the week that ended Sept. 27 from 295,000 the week before. The four-week moving average of first-time claims also declined as did the number of Americans who continued to receive benefits. That figure declined to 2.398 million, its lowest level since June 2006, for the week that ended Sept. 30 from 2.439 million the week before.
  • U.S. factory orders fell 10.1 percent from July to August on a steep decline in transportation orders. (Indeed, outside transportation orders, new orders declined just 0.1 percent.) Shipments were down one percent in August while unfilled orders rose 0.6 percent and inventories were up 0.1 percent.
  • The Markit purchasing managers’ index (PMI) for the U.S. fell slightly to 57.5 in September from 57.9 in August. (The Institute for Supply Management’s U.S. PMI also declined last month.) Despite the decline, Markit Chief Economist Chris Williamson was bullish on the U.S. manufacturing sector. He said, “[T]his slowing needs to be put in the context of the rapid pace of growth seen in recent months. The September PMI reading in fact rounds off the strongest quarter recorded by the survey since the financial crisis, narrowly beating the previous peak seen when the economy was rebounding from recession in the second quarter of 2010.” The Royal Bank of Canada PMI, meanwhile, fell to 53.5 in September from 54.8 in August as output, new orders and new export orders declined. Job creation remained strong, however.
  • Readings from regional U.S. Federal Reserve banks continued to show strength in September as the Dallas Federal Reserve Bank manufacturing index increased to +17.6 in September from +6.8 in August. New orders, capacity utilization, shipments and employment all strengthened. 
  • In other economic news: personal incomes in the U.S. increased 0.3 percent in August while consumption rose 0.5 percent; the Conference Board index of U.S. consumer confidence fell dramatically in September, to 86.0 last month from 93.4 in August; while U.S. construction spending fell 0.8 percent from July 2014 to August 2014, but rose five percent from August 2013 to August 2014.